Gift Card Trends

12/10/2012

Here at ScripSmart we track the terms which people search on the site. It helps us discover new gift cards to rate and also gives us an idea of what type of coverage we have as a whole. It's all very helpful in making ScripSmart better.

This year, I thought it would be fun to take a look at which gift cards have been search for most during 2012. Here is the top 10 most popular gift cards of 2012 based on search requests.

11/23/2012

Today is Black Friday, a day which has come to signal the first day of the holiday shoping season. Millions of Americans are out hunting for the perfect gift and this year many while choose to purchase gift cards.

According to the National Retail Federation, 80% of consumers would buy at least one gift card this holiday season. The study also suggested 6 out of 10 consumers said they would like to receive a gift card and a total of $28.79 billion will be spent on gift cards during the 2012 holiday shopping season.

Simply put, gift cards are extremely popular with both givers and receivers. However, not all gift cards are created equal. The good news is there are plenty of excellent gift cards available and we'd like to recognize those who are at the forefront of offering the most consumer friendly gift card programs.

Starting today and leading up to Christmas Eve, we're going to specially acknowledging one gold rated gift card each day. We'll publish a list of the thirty-two gold gift cards, announce via twitter and display each day's featured gift card on our homepage.

We're doing this because each year we see a slew of press pieces on why gift cards are bad and how they should be avoided. While there are plenty of gift cards with low ratings on ScripSmart, not all gift cards are bad and many of those articles are misleading. The truth is, many gift card issuers do an excellent job of exceeding legal minims and offering product features the law does not require.

So, if your in the market for a gift card this holiday season, take a look at the ratings on ScripSmart and support those who are leading the way and have been awarded a gold badge from our algorithm. Believe me, it's not easy to archive and these guys deserve to be recognized for taking the effort to offer a best of breed product.

InComm issues two of the higher scoring bank-issued gift cards rated by ScripSmart: the Vanilla Visa Gift Card and Vanilla MasterCard gift card. The company will stop selling gift cards in New Jersey by June 30, 2012.

Importantly, InComm also operates several "gift card malls" kiosks often located in grocery stores, convenience stores and gas stations. In short, they help companies like CVS Pharmacy sell gift cards on behalf of other merchants. For example, if you want to buy an Amazon Gift Card, you can visit your local convenience store and pick one up along with a plethora of other options. By removing many of these gift card malls it will certainly put the changes to New Jersey's laws on their radar of more New Jersey consumers.

According to the InComm's press release, the company "...is unable on behalf of its third-party gift card partners to ensure compliance with this law." In other words, they can't ensure the clerk at your local convenience store will be able to capture zip codes from buyers. While I don't believe it's not possible to enforce such a practice (they could suspend sales until the systems are ready), it is something which would not even be helpful in determining the true location of a gift cardholder because the person who buys a gift card (and give their zip code) often gives it to another person (who has another zip code).

For the record, ScripSmart is against gift cards being considered unclaimed property and make no mistake about it: consumers are the ones who will loose out as a result of the changes in New Jersey's laws. These moves by gift card issuers are will preventing the state of New Jersey from seizing gift card funds (after a mere two years of inactivity), make a statement to consumers who buy gift cards and set a precedent for other states who may be considering similar legislation.

Believe it or not, New Jersey lawmakers who sponsored the bill actually claim this is an effort to protect consumers, but it's really about "free" money for the state. But we all know there isn't any such thing as free money and in this case it comes at the expense of consumers and businesses.

This is simply a step in the wrong direction for consumer protection when it comes to gift cards and it seems likely InComm and American Express will not be the only ones to leave New Jersey.

Update 04/05/2012: Blackhawk Network another major provider of gift card malls has announced they will stop selling gift card in New Jersey unless the law is revised.

04/03/2012

It looks like the American Express Gift Card is no longer an option for consumers in New Jersey. According to NorthNewJersey.com, American Express began removing it's gift cards from store shelves several weeks ago and the last one was removed yesterday.

It's all the result of recent changes to New Jersey Gift Card Laws, which require merchants to hand over the value of unused gift cards to the State of New Jersey after two years. The law also requires merchants to collect the zip code of a gift card purchaser to help the state determine the location of the potentially abandoned property.

It's not surprising American Express is first to move on this front, the company already avoids Hawaii and Vermont when selling gift cards. If more merchants follow, it will certainly cause a stir.

Administrative Nightmare or Proof of Consumer Protection

Opponents of the new laws suggest collecting zip codes from buyers is an onerous task requiring expensive upgrades to their systems. Furthermore, selling gift cards at third party locations such as a grocery store makes compliance even more difficult to enforce for card issuers. As a result, they would prefer to avoid selling in the state altogether.

Proponents of the new law suggest American Expresses' willingness to pull out of the market entirely is proof the majority of the revenue generated by such gift card programs is the result of unused gift cards and reason why such laws are needed.

Either way, consumers are loosing out. However, one Assemblyman believes the new laws are protecting consumers. Assemblyman Declan J. O'Scanlon Jr. (R-Monmouth County), is quoted saying:

Mr. O'Scanlon was a sponsor of the new gift card laws and he's simply wrong. When unclaimed property laws are applied to gift cards it hardly helps consumers. Here are a few reasons why:

Only a sliver of the money collected from unused gift cards will end up back in the consumer's hands. One article pegged the number at just 22 cents for every $1,000 seized. That's hardly a help to consumers.

Gift cards are purchased and given to other people. Therefore, the location of the gift cardholder is often unknown. Many of the gift cards New Jersey collects will belong to gift cardholders who reside in another state.

The state of New Jersey is essentially expiring the gift card after two years. While a consumer could get the money from the state, they won't be able to redeem the gift card with the merchant as it was intended.

I'm a proponent of protecting consumers when it comes to gift cards and if New Jersey were really serious about gift card consumer protection they would pass laws which prohibit expiration dates, fees and require merchants to offer cash back for gift cards which have been used at least once and have a balance of $5 or less.

At the very least, New Jersey should take a page from Texas Gift Card Law and exclude gift cards with no fees or expiration date from unclaimed property law.

03/26/2012

In 2010, New Jersey lawmakers passed some rather ridiculous laws effecting those who buy and sell gift cards in the state. In short, the state started to consider gift card unclaimed property after they had been unused for two years, three years before the federal minimum of a gift card expiring. Furthermore, they require merchants to collect the zip code of those who purchase gift cards in order to establish New Jersey as the rightful owner of the property when it becomes unclaimed.

When I first wrote about the changes to New Jersey Gift Card Law, I called it an "egregious gift card money grab". There were several reasons, but mostly because such a move by the state has little to do with protecting consumers and everything to do with supplementing the state's budget.

It's Time To Get Honest About Gift Cards And Escheatment Laws

The goal of unclaimed property (escheatment) law is to reunite the property with the rightful owner. While this makes sense in a number of situations such as bank accounts and farm equipment, gift cards just don't work that same way.

The dollar amount of gift cards returned to consumers is minuscule. According to this article, in 2008, the State of New York collected $9.6 million in unredeemed gift cards and returned a mere $2,150 or 0.022%. In other words, about 22 cents for every $1,000 collected goes back to consumers. Even if that ratio was 100 times more, it would still be just $22 out of every $1,000 collected. The bottom line is unclaimed property laws don't help consumers when they are applied to gift cards.

Furthermore, we all know most often give gift cards are given to other people after they are purchased. As a result, the chances of a gift cardholder resides in another state is quite high, especially considering the location of New Jersey; a state which foolishly believes it can identify the gift cardholder by requiring merchants to collect information at the time of sale. This is nothing more than a tactic for the state to assert it's claim to the property. It's as though state legislators have never used or been given a gift card; otherwise they would know a simple fact: the gift cardholder is likely not the person who purchased the gift card.

Change Is Coming

Thankfully there are some lawmakers in New Jersey who get it. Patrick Diegnan, District 18 (Middlesex), is one of them. He's proposed Assembly Bill 3250 which reverse the laws passed by New Jersey when it comes to unclaimed property and gift cards.

If you live in NJ be sure to watch this Bill and let your representative know you'd like the money spent of gift cards to stay out of the states coffers and in the consumers hands.

Cheers to Patrick Diegnan for his common sense approach to drafting legislation. It's clear he has his constituents interests at the forefront of his mind.

03/21/2012

Recently, I received an email from Metropark, a retailer which filed for bankruptcy protection in 2011. The company's gift cards ultimately became worthless and this email was to announce Metropark was relaunching.

I did some quick research and asked if they were accepting Metropark gift cards; the answer was, no. According to their support staff, they are "a brand new company and do not have any records from the previous owners."

So, if you bought a Metropark gift card for Mother's Day last year, it's still worthless. While I don't believe the lack of records is why they are not accepting Metropark gift cards, I do believe this is a new company who is under no legal obligation to honor the old Metropark gift cards. In fact, it appears Skye Associates LLC purchased the assets of Metropark from the bankruptcy court.

This happens a lot when a company goes out of business. The defunct company's assets are sold to the highest bidder and the proceeds are used to pay off some of the old company's debt holders. The new owner of the brand leverages the company's history and brand recognition to generating sales.

That's because it generates confusion for consumers and makes them feel ripped off. The reality is, consumers don't really care who owns the brand or if the company doesn't have a legal obligation to honor gift cards issued by the previous company. If they have a gift card with a Metropark logo on it, they expect the gift card be honored and it's a lot worse when the company is selling new gift cards while not honoring the old gift cards.

A best practice here would be to refrain from issuing gift cards after acquiring the assets of a brand from the bankruptcy court. Also, when acquiring assets such as a mailing list (they did send me an email), it would be good to ask for gift card records and be prepared to offer something to consumers when they present a gift card issued by the previous owner. It's also a good idea to document the policy and not simply use it as in internal policy to calm an outraged customers.

02/13/2012

The National Restaurant Association (NRA) has competed a survey which produced some interesting results when it comes to Valentine's Day: gift cards are rather popular among men.

Given six options, 46% of men liked the idea of a gift card best. Granted a few of the other five options were not things you'd figure men would like (flowers, jewelry, cologne). Regardless, 46% is higher than I expected, even for men.

The NRA also produced the following chart. As you can see, gift card are not nearly as popular with the ladies, however, 13% still liked the notion of a gift card over other traditional options.

So, if you're thinking about a gift card for the man in your life, take a look at ScripSmart's list of gift cards for men and gift cards for Valentine's Day to get some ideas. If you're in a pinch for time, you can narrow the results by card type to show only egift card which are delivered via email and depending on the gift card, can be delivered within hours.

Next year, I'd like to see the NRA include a dinner date as one of the options, because I think most people are keen on having a nice meal with their significant other and among the options, a gift card comes closest.

01/31/2012

Believe it or not, Valentine's Day 2012 is just around the corner. Last year, I wrote a piece on whether or not gift cards are a good match for Valentine's Day. In short, if you're shopping for that one special person in your life (spouse, girlfriend, boyfriend), it's probably not a good idea.

However, Valentine's Day has a broader meaning. From buying a gift for a parent, siblings, or other family members, I've seen people use it as an opportunity to express their love to those closest to them. If you'd like to buy for someone under these circumstances, a Valentines Day gift card can be a nice treat and a great way to express your appreciation and love for others.

When it comes to jewelry, Tiffany has a great brand. Just be sure to consider the price point of a items your recipient will likely buy. While you can go as low as $50 it's likely only going to be helping in the $250+ range.

People love to read and a magazine subscription is a great gift because it will be delivered more than just once. I like the idea of the Magazine.com eGift Card because it allows the recipient to choose the magazine they like.

12/29/2011

June of last year, Oregon passed SB 756. In short, it requires all gift cards which are sold to be redeemed for cash if the balance is $5 or less and the gift card has been used at least once. The effective date of this legislation is January 1st, 2012.

I'm a fan of seeing cash back laws. The fact is, a consumer should not be required to spend more than the balance of a gift card in order to receive the full benefit and just 3.6% of store-issued gift cards offer a cash back option unless required by law. Because so few retailers offer a cash back policy, you can expect to see more states enact similar legislation in the future.

Not Retroactive, 2011 Christmas Gifts Are Exempt

This change to Oregon Gift Card Law is not retroactive. In other words, all of the gift cards purchased prior to January 01, 2012 are not covered by the new law. So if you received a gift card for christmas this year the merchant is not required to give you cash back. This is only for gift cards sold on January 1st, 2012 and moving forward.

Oregon Got It Right

There are several states with Cash Back Laws. The laws vary slightly, but I think a $5 threshold is reasonable for both consumers and businesses. Thankfully the legislators in Oregon decide to make this rather simple. However, the legislators in Massachusetts did a poor job of crafting a law which is easy for everyone to understand and, in turn, comply.

"A purchaser or holder of a gift certificate which, by its terms, prohibits the purchaser or holder from adding value thereto and which has been redeemed for at least 90 per cent of its face value shall make an election to receive the balance in cash or continue using the gift certificate. A purchaser or holder of a gift certificate which, by its terms, authorizes the purchaser or holder to add value thereto and which has been redeemed in part, such that the value remaining is $5.00 or less, shall make an election to receive the balance in cash or continue using the gift certificate."

That's a mouth full and not very easy for consumers or business owners to understand. I'm not sure why the notion of adding value would even be a factor. Furthermore, adding a percentage in the mix just seems to over complicate the situation. In short, a gift card is redeemable for cash if:

1. The gift card is not reloadable, has been used at least once and the balance is less than $5

2. The gift card is not reloadable and at least 90% of the funds have been redeemed.

For more detail, take a look at ScripSmart's full list of cash back laws for gift cards for each state. Cheers to Oregon's legislators for getting this one right.

12/08/2011

I'm happy to announce a new badge color for gift cards on ScripSmart: Gold. In short, this new badge will be the highest rank possible for a gift card. Gift cards with Gift Card Scores of 90 or more will be awarded the Gold Gift Card Score Badge.

Before today:

After today:

In words, we've split up the old green badge classification to make room for the gold badge at the top. Gift cards scoring between 80-89 will still receive the a green badge. There has been no change to ScripSmart's scoring algorithm.

Why We Did It

Gold is synonymous with first place, crème de la crème or best of the best. When browsing ScripSmart for the best gift cards, it was easy for consumers to know green was the highest level possible because we frequently display a Gift Card Score Key; however, outside of ScripSmart, it's not as clear. After all, there's no comparison of colors and let's be honest, green is not synonymous with first place.

The original notion of ScripSmart's color scheme had more to do with the colors of a stoplight than anything else. Our goal remains making gift cards easy for consumers to understand and the new gold classification helps us achieve this goal.

There is also a big difference between a Gift Card Score of 80 and 99. Furthermore, it's helpful to identify those who are a cut above the rest. If a gift card scores in the 90's it's one of the most consumer friendly gift card products available and it's less likely to have any gotchas a consumer will encounter.

I also believe the new gold badge will help make it easier for merchant's to adopt and strive for a gold ranking. While not every gift card will every be a perfect 100, I believe ScripSmart's product reviews give gift card issuers important feedback as to how their program compares with others.

Gift Card Score Everywhere

In the end, your going to start seeing Gift Card Score in more places. It will help consumers make better decisions and, in turn, improve the gift card industry for both consumers and merchants.

Cinemak has been an early adopter of embracing their Gift Card Score. The Cinemark Gift Card is a terrific program. Earlier this year, they let other know if by placing their Gift Card Score directly on their website using a widget ScripSmart developed. It's a small snippet of code which always reflects their current Gift Card Score. It's something ScripSmart provides to gift card issuers listed on ScripSmart free of charge and I'd say it demonstrates a commitment to deliver a gift card program which is consumer friendly.

Bass Pro Shops has also been an early adopter of Gift Card Score. They're going to be the first to display their Gift Card Scores in-store at locations nation wide. Bass Pro Shops truly understands the importance of offering a consumer friendly program and by displaying their excellent Gift Card Scores, with their help ScripSmart in well on it's way to accomplishing our mission of making gift cards better.